Agri News, MN
11-20-07
International events have big impact on U.S. farmers
By Jean Caspers-Simmet
Agri News staff writer
AMES, Iowa -- In today's dynamic agricultural economy, what's happening in
China, South America or Europe are as likely to affect prices as what's
happening in the next state.
Iowa State University Extension grain marketing economist Robert Wisner
was reminded of that during recent visits to China and several international
biofuels conferences.
Wisner was in China in 2000 and he noticed big changes when he visited this
fall.
"I was struck by tremendous economic changes that have occurred since 2000
when I was there last," Wisner said. "That Includes industrial epxansion out into
rural areas taking up crop land."
He was told that China is moving forward with plans as a result of the Three
Gorges Dam on Yangzi River to move water from the Yangzi to Yellow River in
north which goes through Corn Belt of China. The hope is to expand irrigated
acres and total acres of crops.
Back in 2000 the project was to be completed it in seven years.
"It's clear they will not make the seven-year deadline, but they are moving
forward with it and will be signficant longer term," he said.
The number of Chinese driving cars has icnreased tremendously since Wisner's
last visit to China. Automotive sales in mid summer this year were up 38 percent
from last year.
"It's obvious from looking at the streets and traffic patterns that there are many
more vehicles than seven years ago," Wisner said. "It will be a major force in
upward pressure on petroleum prices."
Wisner said higher crop prices and tighter world grain supplies have created
incentives for the Chinese to use more crop fertilzier. That is part of the reason
for the upward pressure on fertilizer prices.
During his recent trip, he visited the country's largest ethanol plant.
"It's a reminder that biofuels developments are not just a U.S. phenomenon,"
Wisner said. "China is using 260 million bushels of corn annually for ethanol. It
appears the Chinese will try to prevent any further expansion in the corn-based
ethanol industry. They're looking at alternative raw material for ethanol."
Wisner's participation in a couple of recent global biofuels conferences reiforced
that U.S. biofuels' boom is occurring in other countries.
"Numbers I've seen in print indiciate there a total of 42 other countries that are
promoting biofuels, and I believe that number is low," Wisner said. "Other
countreis are seeing addtional demand for cropland to produce fuel crops.
Biodesel has come on very strong in Europe. Brazil, which has a well developed
industry making ethanol out of sugar cane, is developing a biodiesel program. A
large number of other countreis are working on ethanol or biodiesel in various
government incentives."